Wheat Futures Surge on Russia-Ukraine Black Sea Tensions

The price of wheat futures has surged in July due to escalating tensions between Russia and Ukraine over Black Sea shipping lanes. The conflict has disrupted grain exports, forcing a cut in Russian wheat export forecasts by about 4% for the current marketing season.

USDA projects the smallest winter wheat crop in 61 years, with hard red winter production at its lowest level since the late 1950s due to severe drought across the Southern Great Plains. Winter wheat condition ratings stood at only 26% good to excellent, more than 20 points below year-ago levels.

The market has held above the yearly VWAP since January and has been making higher highs since March, but it has met selling once approaching prior resistance. The key level to watch is 660, where buyers are holding bids. A bullish scenario sees a move back up toward the 720 area, while a bearish scenario expects a move down to the 620 area if buyers fail to defend 660.